UP Tax Dept Busts Rs 8 Crore Timber Tax Evasion Case Involving 12 Fake Companies
UP Tax Dept Busts Rs 8 Crore Timber Tax Evasion Case Involving 12 Fake Companies
The Uttar Pradesh State Tax Department caught a big case of tax evasion worth Rs 8 crore when they stopped a timber truck during a late-night check. Officials found that 12 different companies were all using the same mobile number, showing that these were fake companies set up to avoid paying taxes.
Following a complaint by State Tax Officer Sunil Kumar Dagar, the police have filed a case against the main accused, Ehtesham Ahmed, the truck driver Farman, and one other person who hasn’t been identified yet. They are being investigated for cheating and fraud.
This incident happened on November 14 around 1:30 a.m., when the State Tax mobile team was conducting routine inspections in the Dehri Khurram Umri Kala area. The team stopped a truck loaded with timber and questioned the driver (Farman), who was a resident of Bijnor district. He told the officials that the consignment belonged to Jara Traders of Thakurdwara and was being transported to Lucky Timber, located in the Saharanpur-Yamunanagar belt. Officials inspected the document which exposed Tax Invoice No. 179, Issued on November 13, Quantity of timber of 48,200 kg and a taxable value of Rs 3.12 lakh.
During the inspection, the team asked the driver to connect them with the firm’s owner, Ehtesham Ahmed, through the phone. However, the next day when the team checked on the same mobile number, they found that it was connected with 12 different GST-registered firms.
Acting on the discovery, the Assistant Commissioner, State Tax (Sector-2, Sitapur), conducted a physical investigation of the locations and documents connected with the Jara Traders. Investigation confirmed that the firm did not exist at the registered location, the business documents were Fictitious and there was no actual trading activity.
The department has now requested the Central GST authorities to terminate the registrations of all entities connected to the number. Team added that Ehtesham allegedly used these 12 shell companies to transport timber outside the state, evading GST by creating fake supply through bogus invoices and e-way bills.
The Additional Commissioner (Grade-II) said that three vehicles belonging to Jara Traders have already been taken by the authorities. The company earns around Rs 67 crore a year, and officials think the government may have lost at least Rs 8 crore in taxes. More companies connected to this group could also face investigation as authorities follow the money.